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GRUH Finance Ltd.

BSE: 511288 Sector: Financials
NSE: GRUH ISIN Code: INE580B01029
BSE 00:00 | 15 Oct GRUH Finance Ltd
NSE 05:30 | 01 Jan GRUH Finance Ltd
OPEN 304.00
PREVIOUS CLOSE 317.30
VOLUME 376088
52-Week high 332.35
52-Week low 229.10
P/E 52.02
Mkt Cap.(Rs cr) 23,291
Buy Price 317.30
Buy Qty 6875.00
Sell Price 317.30
Sell Qty 1622.00
OPEN 304.00
CLOSE 317.30
VOLUME 376088
52-Week high 332.35
52-Week low 229.10
P/E 52.02
Mkt Cap.(Rs cr) 23,291
Buy Price 317.30
Buy Qty 6875.00
Sell Price 317.30
Sell Qty 1622.00

GRUH Finance Ltd. (GRUH) - Director Report

Company director report

TO THE MEMBERS

Your directors are pleased to present the 33rd Annual Report of your Companywith the audited accounts for the year ended March 31 2019.

Financial Results - Based on Ind AS Financial Statements

(Rs. in crore)
For the year ended March 31 2019 For the year ended March 31 2018
Profit Before Tax 615.04 567.15
Provision for Tax (Net of Deferred Tax) 167.84 164.40
Profit After Tax 447.20 402.75
Add:
Balance brought forward from last year 540.64 447.33
Amount available for appropriation 987.84 850.08
Appropriations:
Statutory Reserve u/s 29C of NHB Act & u/s 36(1)(viii) of I.T. Act 105.00 106.25
General Reserve 85.00 80.00
Dividend including tax thereon pertaining to previous year paid during the year 145.50 123.00
Remeasurement of Defined Benefit Plans 0.53 0.19
Balance carried to Balance Sheet 651.81 540.64
987.84 850.08

Merger of the Company with Bandhan Bank Limited

The board of directors of the Company at its meeting held on January 7 2019 approvedthe Composite Scheme of Arrangement ("Scheme") for the merger of the Companywith and into Bandhan Bank Limited under Sections 230-232 of the Companies Act 2013subject to receipt of applicable approvals.

The proposed amalgamation has been approved by the Competition Commission of India onApril 15 2019. No objection has been issued by the National Housing Bank (NHB) on March4 2019 the National Stock Exchange of India Limited on April 3 2019 and the BSE Limitedon April 3 2019 respectively. Housing Development Finance Corporation Limited andBandhan Bank Limited have also received approval from the Reserve Bank of India.

The Scheme remains subject to approvals from the National Company Law Tribunal (NCLT)the respective shareholders and creditors of the Company as applicable and otherapplicable statutory and regulatory approvals. Similar approvals are also pending inrespect of Bandhan Bank.

Indian Accounting Standards (Ind As)

The Ministry of Corporate Affairs (MCA) based on its notification in the OfficialGazette vide Notification G.S.R. 111(E) and G.S.R. 365(E) dated February 16 2015 andMarch 30 2016 respectively notified the Indian Accounting Standards (Ind AS) applicableto certain class of companies. Ind AS has replaced the Indian GAAP prescribed undersection 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules2014. These notifications are applicable to all Housing Finance Companies (HFCs) effectiveApril 1 2018. Accordingly your Company has adopted Ind AS as prescribed under Section133 of the Companies Act 2013 read with Rule 3 of the Companies (Indian AccountingStandards) Rules 2015 and relevant amendment /rules made thereafter from April 1 2018.The effective date of such transition is April 1 2017. Such transition has been carriedout from the erstwhile Accounting Standards notified under the Act read with relevantrules issued thereunder and guidelines issued by NHB (Collectively referred to as‘the Previous GAAP'). The impact of transition has been recorded in the openingreserves as at April 1 2017. The corresponding figures presented in these financialstatements have been prepared on the basis of the previously published financialstatements under the previous GAAP duly re-stated to Ind AS. These Ind AS adjustments havebeen audited by the statutory auditors. The financial statements have been prepared basedon the notified Schedule III for Non-Banking Financial Companies issued by the Ministry ofCorporate Affairs on October 11 2018. The reconciliation and descriptions of the effectof the transition from IGAAP to Ind AS have been provided in note 4 in the note toaccounts in the financial statements.

Dividend

Your directors recommend payment of dividend of Rs 2.00 per equity share of face valueof Rs 2 each for the year ended March 31 2019 on the enhanced paid-up capital of theCompany post the issue of bonus shares in the ratio of 1:1. Considering that the Companydeclared a 1:1 bonus during the year the effective dividend for the year is Rs 4.00 perequity share (pre-bonus) as compared to a dividend of Rs 3.30 per equity share in theprevious year. Although the bonus shares were allotted on June 8 2018 dividend on theseshares will be payable for the entire year. The dividend payout ratio for the yearinclusive of additional tax on dividend will be 40%. The dividend recommended is inaccordance with the principles and criteria as set out in the Dividend Distribution Policywhich has been approved by the board of directors. The policy is provided as‘Annexure A' to this Report.

Changes in Share Capital

During the year the authorised share capital was increased from Rs 100 crore dividedinto 50 crore equity shares of face value of Rs 2 each to Rs 200 crore divided into 100crore equity shares of face value of Rs 2 each.

During the year the paid up equity share capital increased as a result of the 1:1Bonus issue whereby your Company allotted 365720011 bonus shares. The paid-up sharecapital also increased as a result of allotment of 2247490 equity shares of face valueof Rs 2 each upon exercise of stock options under ESOS-2015. As at March 31 2019 theequity share capital stood at Rs 1467375024 divided into 733687512 equity shares ofRs 2 each.

Disbursements

Loan disbursements during the year were Rs 4936 crore. GRUH continued to focus mainlyon the retail segment and disbursed Rs 4213 crore to 42994 loans. Cumulativedisbursements as at March 31 2019 were Rs 33392 crore.

Rural Housing

During the year GRUH disbursed Rs 1578 crore in respect of 15546 loans in the ruralareas. Cumulative disbursements under the rural housing has been Rs 13470 crore inrespect of 226921 loans. Affordable Housing GRUH has signed the MOU with the Governmentof India for the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojanafor Economically weaker Section (EWS) Lower Income Group (LIG) and Middle Income Group(MIG) segments. GRUH has been an active contributor to the scheme and has sanctioned Rs1944 crore during the year in respect of 18736 loans wherein the customers were eligiblefor CLSS. During the year GRUH submitted claims aggregating to a subsidy of Rs 391 crorein respect of 16090 loans aggregating to loan amount of Rs 1557 crore. GRUH received andcredited claims of Rs 464 crore in respect of 18990 loan accounts aggregating to loanamount of Rs 1763 crore. The subsidy received is credited to the respective customer'sloan account and the instalment amount is reduced keeping the balance tenure constant.Claims in respect of 4452 loans are awaiting sanction from NHB / credit to individualcustomers' loan accounts in respect of loan amount of Rs 454 crore.

Since inception of the scheme GRUH has sanctioned 53490 loans wherein customers areeligible for CLSS subsidy in respect of loan amount of Rs 5140 crore. GRUH has receivedclaim of Rs 727 crore in respect of 31349 loans.

The majority of the claims submitted are in respect of the EWS and LIG customers.

Loan Assets

As at March 31 2019 the loan assets increased to Rs 17408 crore recording a growthof 11.68%. Loan assets in respect of the retail home loans grew by 11.28% and stood at Rs16188 crore.

Impairment of Financial Instruments under Ind AS

Under Ind AS asset classification and provisioning moves from the ‘rule based'incurred losses model to the Expected Credit Loss (ECL) model of providing for expectedfuture credit losses. Thus loan loss provisions are made on the basis of the Company'shistorical loss experience and future expected credit loss after factoring in variousmacro-economic parameters. Under Ind AS asset classification comprises three categoriesbased on ageing of Exposure at Default (EAD) which is principal and accrued interest.Outstanding between 0 to 30 days are Stage 1 assets outstanding between 31 days to 89days are Stage 2 assets and Stage 3 assets are those assets where outstanding EAD is for90 days and above.

Accordingly as per Ind AS GRUH's Stage 1 Loan Assets have improved from 94.48% as atMarch 31 2018 to 95.58% as at March 31 2019. Stage 2 loans have improved from 5.07% asat March 31 2018 to 3.76% as at March 31 2019. Loans under Stage 3 have increased from0.45% as at March 31 2018 to 0.66% as at March 31 2019. As per Ind AS 109 on FinancialInstruments GRUH is required to carry total provisions of Rs 45.16 crore towards expectedfuture credit losses which is 0.26% on Loan Assets of Rs 17408 crore. Of this provisionof Rs 9.28 crore is required towards Stage 3 loans of Rs 114 crore. Provisions amountingto Rs 35.88 crore is required on Stage 1 and Stage 2 loan assets of Rs 17294 crore.However as a measure of prudence your directors have decided to carry a total provisionof

Rs 119.58 crore towards future expected credit losses under Ind AS. During the yearGRUH has written off Rs 0.86 crore in respect of individual loans where the recovery wasdifficult in the near future. However GRUH continued the recovery efforts in respect ofwritten off loans of earlier years and could effect recoveries of Rs 0.46 crore during theyear in respect of such written off loans. GRUH also took possession of properties of thedefaulting borrowers under the SARFAESI Act and has sold few of such acquired properties.Standard Assets NPAs and Provisions under NHB norms as per IGAAP As per the prudentialnorms prescribed by NHB for Standard Loan Assets HFCs are required to carry a provisionof 0.25% on Individual Home Loans 1% on Individual NRP Loans 0.75% on developer loansfor residential projects and 1% on developer loans for commercial projects.

Accordingly GRUH is required to carry total provision of Rs 51.48 crore on StandardLoan Assets comprising Individual Home Loans Individual NRP Loans and Developer Loansaggregating to Rs 17263 crore. This provision includes provision of Rs 0.14 crore towardsStandard Assets in respect of instalments due from borrowers of Rs 44.02 crore and aprovision of Rs 0.02 crore in respect of Standard Assets on Loan against GRUH's fixeddeposits and interest accrued thereon of Rs 2.12 crore. NHB vide its notification datedAugust 2 2017 reduced the provisioning requirement on Standard Individual Home Loansfrom 0.40% to 0.25%. However as per the said notification excess provision on account ofreduction in provisioning requirement is to be carried forward. GRUH carries a provisionof Rs 16.26 crore on account of such reduction.

Therefore against a provisioning requirement of Rs 51.48 crore on total StandardAssets GRUH carries a provision of Rs 67.74 crore. As per the prudential norms of NHBGRUH has identified Non-Performing Assets (NPAs) and made required provisions on such NPAsbesides not recognising income in respect of such NPAs. An asset is NPA if the interest orprincipal instalment is overdue for 90 days. GRUH's NPAs as at March 31 2019 were Rs101.97 crore in respectof Individual Home loans and Rs 12.47 crore in respect ofIndividualNRP loans. There were no NPAs under developer loans. GRUH is required to carry a provisionof Rs 30.87 crore towards non-performing loans as per NHB norms. Accordingly under NHBnorms GRUH is required to carry total provision of Rs 98.61 crore towards NPAs andStandard Assets. Net Non-Performing Loans were 0.35% on outstanding loans of Rs 17377crore.

Borrowings NHB Refinance

GRUH received refinance sanction of Rs 2000 crore from NHB and the same was availedduring the year. The refinance outstanding as at March 31 2019 was Rs 3706 crore.

Bank Term Loans

GRUH received fresh sanctions from banks amounting to Rs 2850 crore and the same wasavailed during the year. The outstanding bank term loans as at March 31 2019 were Rs6775 crore.

Subordinated Debt and Non-Convertible Debentures (NCDs) As at March 31 2019 GRUH'soutstanding subordinated debt stood at Rs 35 crore. The debt is subordinated to presentand future senior indebtedness of the company and has been assigned rating of "ICRAAAA(*)" and "CRISIL AAA(*)" indicating highest degree of safety regardingtimely payment of financial obligations. Based on the balance term to maturity as atMarch 31 2019 Rs 21 crore of the face value of subordinated debt is considered as Tier– II capital under the guidelines issued by NHB for the purpose of computation ofCapital Adequacy Ratio.

(*)Indicates ‘on watch with negative implications' post merger announcement onJanuary 7 2019.

During the year GRUH raised NCDs amounting to Rs 1230 crore on a private placementbasis. The outstanding NCDs as at March 31 2019 stood at Rs 4305 crore. NCDs are rated"ICRA AAA(*)" and "CRISIL AAA

(*)" indicating highest degree of safety regarding timely payment of financialobligations.

(*)Indicates ‘on watch with negative implications' post merger announcement onJanuary 7 2019.

In the case of ratings of both subordinated debt and NCDs the rating agencies haveindicated that the above ratings are placed on ‘rating watch with negativeimplications' following the announcement of the merger on January 7 2019. This is becauseonce the merger transaction is completed the analytical approach of the rating agencieswould no longer factor the expectation of support of its majority owner HDFC Limited.

Commercial Paper

GRUH's commercial paper is rated "ICRA A1+" and "CRISIL A1+"indicating very strong degree of safety regarding timely payment of financial obligations.As at March 31 2019 outstanding commercial paper was Rs 200 crore.

Deposits

GRUH mobilised deposits of Rs 542 crore and experienced a renewal ratio of 48.30%during the year. The outstanding balance of deposits as at March 31 2019 was Rs 1562crore.

GRUH's Deposit programme is rated "MAAA(*)" by ICRA and "FAAA(*)"by CRISIL. These ratings indicate very strong degree of safety as regards timely repaymentof principal and interest.

There has been no default in repayment of deposits or payment of interest during theyear. All the deposits accepted by the Company are in compliance with the requirements ofNHB guidelines and Chapter-V of the Companies Act 2013.

(*)Indicates ‘on watch with negative implications' post merger announcement onJanuary 7 2019.

Investments

GRUH continues to maintain its Statutory Liquidity Ratio (SLR) as stipulated by NHB.Accordingly GRUH carried investments in approved securities aggregating to Rs 229 croreas at March 31 2019 to meet the requirement of the SLR. GRUH has classified itsinvestments as long-term and valued them at cost. Adequate provision towards loss if anyto be experienced on redemption of investments on maturity has been made.

Unclaimed Deposits and Unclaimed NCDs

As at March 31 2019 deposits and / or interest thereon amounting to Rs 57.52 crorehad not been claimed by 2122 depositors. Depositors were intimated regarding the maturityof deposits with a request to either renew or claim their deposits and subsequentreminders have been sent.

As per the provisions of section 125 of the Companies Act 2013 deposits NCDs and/orinterest thereon remaining unclaimed and unpaid for a period of seven years from the datethey became due for payment are required to be credited to Investor Education andProtection Fund (IEPF) established by the Government of India.

Accordingly an amount of Rs 4.54 lacs in respect of unclaimed deposits and interestthereon was transferred to the IEPF during the year. As at March 31 2019 there were noNCDs amount or interest thereon which remained unclaimed and unpaid.

Unclaimed Dividends and Unclaimed Shares

As at March 31 2019 dividend amounting to Rs 2.08 crore had not been claimed byshareholders of the Company. The Company takes various initiatives to reduce the quantumof unclaimed dividend and has been periodically intimating the concerned shareholdersrequesting them to encash their dividend before it becomes due for transfer to the IEPF.

Unclaimed dividend amounting to Rs 15.06 lac for FY 2010-11 was transferred to the IEPFon August 28 2018. In terms of the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 as amended the Company transferredthe corresponding shares to IEPF where the dividends for the last seven consecutive yearshave not been claimed by the concerned shareholders.

The unclaimed dividend in respect of FY 2011-12 must be claimed by shareholders on orbefore July 17 2019 failing which the Company will be transferring the unclaimeddividend and the corresponding shares to the IEPF within a period of 30 days from thatdate. The concerned shareholders however may claim the dividend and shares from IEPFthe procedure for which is detailed in the Shareholders' Information section.

In terms of the IEPF (Uploading of information regarding unpaid and unclaimed amountslying with companies) Rules 2012 GRUH has made the relevant disclosures to the Ministryof Corporate Affairs (MCA) regarding unclaimed dividends and unclaimed matured depositsalong with interest accrued thereon. GRUH has uploaded the prescribed information on www.iepf.gov.inand www.gruh.com. Risk Management Framework Regulation 21 of SEBI (LODR)Regulations 2015 has effective April 1 2019 mandated for the top 500 listed entitiesdetermined on the basis of market capitalisation as at the end of the immediate previousfinancial year that they shall constitute a Risk Management Committee (RMC) of Directors.However your boards of directors have constituted Risk Management Committee of Directorseffective from October 29 2018. Prior to that the board had delegated responsibility ofoverseeing risk management framework including asset liability management to the AuditCommittee.

GRUH has a Risk Management framework approved by the board of directors. GRUH's RiskManagement framework provides the mechanism for risk assessment and mitigation. GRUH alsohas an Asset Liability Management (ALM) policy approved by the board. During the year theRMC reviewed the risks associated with the business of GRUH its root causes and theefficacy of the measures taken to mitigate the same. RMC also reviewed the risk arisingfrom the gaps in the liquidity and interest rate sensitivity statements and took decisionsin mitigating the risk by ensuring adequate liquidity through maturity profile of assetsand liabilities. The observations of the Risk Management Committee of directors if any onthe key risks associated with the business and ALM were reported to the board. The boardof directors also reviewed the key risks associated with the business and ALM of theCompany the procedures adopted to assess the risks efficacy and mitigation measures.

Regulatory Guidelines

GRUH continues to comply with the guidelines issued by NHB regarding accountingguidelines prudential norms for asset classification income recognition provisioningcapital adequacy concentration of credit credit rating Know Your Customer (KYC)guidelines and Anti Money Laundering (AML) standards fair practices code and real estateand capital market exposures. The details of compliances are outlined in the ManagementDiscussion and Analysis Report.

GRUH's Capital Adequacy Ratio stood at 20.30% as against the minimum requirement of12%. Tier – I capital was 19.26% against the minimum requirement of 6%.

The Government of India has set up the Central Registry of Securitisation AssetReconstruction and Security Interest of India (CERSAI) under section 21 of the SARFAESIAct 2002 to have a central database of all mortgages created by lending institutions. Theobject of this registry is to compile and maintain data relating to all transactionssecured by mortgages. Accordingly GRUH is registered with CERSAI and has been submittingdata in respect of its loans. Human Resource Development At GRUH human resourcedevelopment is considered vital for effective implementation of business plans. Constantendeavours are being made to offer professional growth opportunities and recognitionsapart from imparting training to employees. During the current year in-house trainingprogrammes were provided to employees inter alia in lending operationsrecoveries KYC IT system & security and accounts. Employees were also nominated fortraining programmes conducted by NHB and other institutions. 46 employees underwentdifferent training programmes.

GRUH's staff strength as at March 31 2019 was 677. Particulars of Employees

GRUH had 2 employees as at March 31 2019 employed throughout the year who were inreceipt of remuneration of Rs 1.02 crore or more per annum or Rs 8.50 lacs or more permonth if employed for part of the year.

In accordance with the provisions of section 197 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended the name and other particulars of such employees are set out in the annex to theDirectors' Report. However as per the provisions of section 136 of the Companies Act2013 the Directors' Report is being sent to all shareholders of the Company excluding theannex. The annex is available for inspection by the members at the registered office ofthe Company during business hours on working days up to the date of ensuing Annual GeneralMeeting. Any shareholder interested in obtaining a copy of the said annex may write to thecompany secretary at the registered office of the Company.

Employees Stock Option Scheme

The stock options granted to the eligible employees operate under the scheme ESOS-2015.There has been no material variations in the terms of the options granted under the schemeand the scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations2014. The disclosures as required under Regulation 14 of the said regulations have beenplaced on the website of the Company.

The Board of Directors at its meeting held on March 14 2019 upon the recommendationof the Nomination and Remuneration Committee of Directors of the Company approved theissue of additional 9000000 equity shares of Rs 2 each of the Company to eligibleemployees under existing Employee Stock Option Scheme 2015 in terms of SEBI (Share BasedEmployee Benefits) Regulations 2014 and amendment of the Employee Stock Option Scheme2015 by increasing the number of stock options to be granted to eligible employees.Subsequently members of the Company with requisite majority have on April 22 2019passed the said special resolution through postal ballot.

Prevention Prohibition and Redressal of Sexual Harassment of Women at Workplace TheCompany is an equal opportunity employer and consciously strives to build a work culturethat promotes dignity of all employees. As required under the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andRules framed thereunder the Company has implemented a policy on Prevention of SexualHarassment of Women at Workplace. An Internal Complaints Committee has been set up toreceive complaints investigate the matter and report to the management.

At the begining of the year there was no complaint pending. During the year nocomplaint was received by the Committee and hence no complaint was pending at year end.

Auditors Statutory Auditors

At the 31st Annual General Meeting (AGM) held on June 15 2017 the membershad appointed M/s. Deloitte Haskins & Sells LLP Chartered Accountants (FirmRegistration No. 117366W/W-100018) as Statutory Auditors for a term of five yearsbeginning from the conclusion of the 31st AGM till the conclusion of the 36thAGM subject to them ratifying the said appointment at every AGM.

The Company has received confirmation from M/s. Deloitte Haskins & Sells LLPChartered Accountants to the effect that their appointment would be in terms of sections139 and 141 of the Companies Act 2013 and rules made thereunder.

In terms of the provisions relating to statutory auditors forming part of the CompaniesAmendment Act 2017 notified on May 7 2018 ratification of appointment of StatutoryAuditors at every AGM is no more a legal requirement. Accordingly the notice conveningthe ensuing AGM does not carry any resolution on ratification of the appointment of theStatutory Auditors.

The Statutory Auditors have audited the books of accounts of the Company for thefinancial year ended March 31 2019 and have issued the Auditors' Report thereon. TheStatutory Auditors have not made any adverse comments or given any qualificationreservation or adverse remarks or disclaimer in their Audit Report.

Secretarial Audit

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 GRUH has appointed Mr.M. C. Gupta of M/s M. C. Gupta & Co. a firm of Company Secretary in practice toundertake the Secretarial Audit of the company. The Report of the Secretarial Audit isannexed herewith as ‘Annexure B' to this report. The Secretarial Auditor has not madeany adverse comments or given any qualification reservation or adverse remarks ordisclaimer in their Audit Report.

Directors and Key Managerial Personnel

In accordance with Articles 134 and 135 of the Articles of Association of the Companyand the provisions of the Companies Act 2013 Mr. Keki M. Mistry director of theCompany is liable to retire by rotation at the ensuing AGM and is eligible forre-appointment.

Necessary resolutions for the re-appointment of the aforesaid director and the detailedprofile has been included in the notice convening the ensuing AGM and details of theproposal for re-appointment is mentioned in the explanatory statement of the notice.

Ms. Renu S. Karnad Non-executive director of the Company resigned from the Boardw.e.f. March 8 2019 due to personal reasons and other commitments.

Mr. Prafull Anubhai Independent Director of the Company completed his 2nd termon March 31 2019 and ceased to be a director of the Company from the close of March 312019.

Your directors place on record their appreciation for the invaluable contributions madeby Ms. Renu S. Karnad and Mr. Prafull Anubhai during their term as directors of theCompany.

All the directors of the Company have confirmed that they are not disqualified frombeing appointed as directors in terms of section 164 of the Companies Act 2013.

There was no change in the Key Managerial Personnel during the year.

Details of managerial remuneration as required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are given as per‘Annexure C' to this report. Directors' Responsibility Statement In accordance withthe provisions of section 134(3)(c) of the Companies Act 2013 and based on theinformation provided by the management your directors state that: i. In the preparationof annual accounts the applicable accounting standards have been followed; ii. Accountingpolicies selected were applied consistently.

Reasonable and prudent judgements and estimates were made so as to give a true and fairview of the state of affairs of the Company as at the end of March 31 2019 and of theprofit of the Company for the year ended on that date; iii. Proper and sufficient care hasbeen taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; iv. The annual accounts of theCompany have been prepared on a going concern basis; v. Internal financial controls havebeen laid down to be followed by the Company and such internal financial controls wereadequate and were operating effectively; vi. Systems to ensure compliance with theprovisions of all applicable laws are in place and were adequate and operatingeffectively. Corporate Social Responsibility Initiatives In accordance with the provisionsof section 135 of the Companies Act 2013 and the rules framed thereunder the Company hasa Corporate Social Responsibility Committee of directors comprising Mr. S. G. Mankad -Chairman Mr. Pankaj Patel Mr Keki M. Mistry and Mr. Sudhin Choksey and has inter aliaalso formulated a CSR Policy. The role of the CSR Committee is to review the CSR policyindicate activities to be undertaken by the Company towards CSR activities and formulate atransparent monitoring mechanism to ensure implementation of projects and activitiesundertaken by the Company towards CSR activities.

GRUH was required to spend Rs 9.11 crore towards CSR activities during the year. GRUHhas approved CSR proposals aggregating to Rs 10.37 crore and incurred CSR expenditure ofRs 6.23 crore during the year. Cumulatively GRUH has approved CSR proposals aggregatingto Rs 25.94 crore and has incurred CSR expenditure of Rs 18.15 crore. GRUH has approvedCSR proposals in the field of providing education promoting health care sanitationeducation for differently abled children promoting vocational skills empowerment ofwomen and gender equality and protection of national heritage art and culture. The AnnualReport on CSR Activities which forms part of the Directors' Report is annexed as‘Annexure D' to this report.

Business Responsibility Reporting

As required under Regulation 34(2)(f) of SEBI (Listing Obligations and DisclosureRequirements) (LODR) Regulations 2015 Business Responsibility Report forms part of theDirectors' Report and is annexed as ‘Annexure E' to this report.

Extract of Annual Return [Form MGT-9]

As per the requirements of Section 92(3) and 134(3)(a) of the Act and Rules framedthereunder the extract of the annual return for FY 2018-2019 is given in ‘AnnexureF' in the prescribed Form No. MGT-9 which is a part of this report. The same is availableon https://www.gruh.com/ extract-annual-return/ Requirement for maintenance of costrecords: Since the Company is into housing finance the Company is not required tomaintain cost records as specified by the Central Government under section 148(1) of theCompanies Act 2013.

Particulars

Particulars of loans guarantees or investments made :

Since the Company is a housing finance company provisions of section 186 of theCompanies Act 2013 relating to loans made guarantees given or securities provided are notapplicable to the company. As regards investments made by the Company the details of thesame are provided under Note to Accounts forming part of the annual accounts of theCompany for the year ended March 31 2019.

Particulars of Contracts or arrangements entered into with related parties : Inaccordance with the provisions of section 188 of the Companies Act 2013 and rules madethereunder the transactions entered into with related parties are in the ordinary courseof business and on an arm's length pricing basis the details of which are included in thenotes forming part of the financial statements. There are no material related partytransactions entered during the year. Accordingly information in form AOC - 2 is notannexed. As required by NHB notification no. NHB.HFC.CG-DIR.1/MD&CEO/2016 datedFebruary 9 2017 a policy on Transactions with Related Parties is given as ‘AnnexureG' to this report.

All related party transactions were approved by Audit Committee Board and reviewed byStatutory Auditors.

Material Changes details of Subsidiaries Litigations

There has been no material changes and commitments affecting the financial position ofthe company which has occurred between the end of the financial year to which thefinancial statements relate and the date of the report.

The Company does not have any subsidiary. There has been no change in the nature ofbusiness of the Company.

No significant or material orders have been passed by the regulators or courts ortribunals impacting the going concern status of the company and / or the company'soperations in future.

Particulars regarding Conservation of Energy Technology Absorption and ForeignExchange Earnings and Expenditure Particulars relating to conservation of energy andtechnology absorption stipulated in the Companies (Accounts) Rules 2014 are notapplicable. GRUH does not have any foreign exchange earnings. GRUH has paid dividend of Rs0.41 crore in foreign currency. Management Discussion and Analysis Report and Report ofthe Directors on Corporate Governance In accordance with the SEBI (LODR) Regulations 2015and NHB Directions the Management Discussion and Analysis Report and the Report of theDirectors on Corporate Governance form part of this report.

Acknowledgements

Your directors take this opportunity to place on record their appreciation to allemployees for their hard work spirited efforts dedication and loyalty to GRUH. Theemployees have worked based on principles of honesty integrity and fair play and this hashelped GRUH in maintaining its growth. The directors also wish to place on record theirappreciation to shareholders depositors referral associates NHB financial institutionsand banks for their continued support.

On behalf of the Board of Directors
Mumbai Keki M. Mistry
April 30 2019 Chairman
DIN : 00008886